Payment Options Types

You're correct that there are several payment options for EC2 instances. Let's break them down:

1. On-Demand: Pay by the second for instances you launch, with no long-term commitments.

2. Savings Plans:

   • Compute Savings Plans: Offer up to 66% savings off On-Demand rates, with flexibility across instance family, size, OS, tenancy, and region.
   • EC2 Instance Savings Plans: Provide up to 72% savings, but are specific to a particular instance family in a region.

3. Reserved Instances (RIs):

   • Standard RIs: Offer up to 72% discount off On-Demand rates for a specific instance type and region.
   • Convertible RIs: Provide up to 54% discount and allow changes to instance attributes.

4. Spot Instances: Allow you to request unused EC2 capacity at significant discounts, but instances can be interrupted.

Regarding a 3-year commitment and instance upgrades: If you choose a 3-year term for Standard RIs, you're committed to that specific instance type for the full term. Upgrading would require purchasing new RIs or using On-Demand pricing for the difference. Convertible RIs offer more flexibility for changes but at a lower discount.

For Savings Plans, you commit to a specific dollar amount per hour, which allows more flexibility in instance types and sizes within that spend.

Payment options for 3-year reservations:

1. All Upfront: Pay the entire amount at the start.
2. Partial Upfront: Pay a portion upfront, then a discounted hourly rate for the remaining term.
3. No Upfront: Pay nothing initially, then a discounted hourly rate for the entire term.

For Partial Upfront, the upfront portion isn't necessarily half. It varies, but you pay a portion upfront and the rest monthly at a discounted rate. There isn't a specific yearly payment option for 3-year reservations, but you could potentially achieve this through careful budgeting of the monthly payments.

Regarding upgrades:

• Standard RIs don't support direct upgrades, but you can sell them on the RI Marketplace.
• Convertible RIs allow exchanges for different instance types.
• Savings Plans offer the most flexibility for changing instance types within your committed spend.
• On-Demand and Spot instances can be changed at any time without commitment.

Always consider your workload's flexibility and predictability when choosing a payment option. If you need long-term capacity with the ability to upgrade, Convertible RIs or Savings Plans might be more suitable than Standard RIs.
Sources
Reserved Instances payment options - Amazon EC2 Reserved Instances and Other AWS Reservation Models
Best Practice 18.1 – Understand the payment and commitment options available for Amazon EC2 - SAP Lens
Amazon EC2 billing and purchasing options - Amazon Elastic Compute Cloud
Reserved Instances for Amazon EC2 overview - Amazon Elastic Compute Cloud
Reserved Instances - Amazon EC2 Reserved Instances - AWS